Tiffany Zhong was a venture capitalist at Binary Capital – a $500m early stage consumer tech fund started by investors in Snapchat, Instagram, Twitter, Chloe & Isabel, Stitch Fix, etc. In a medium post, she shared tips and lessons startup founders should bear in mind when seeking VC investments. Tiffany claims what makes or mar
Tiffany Zhong was a venture capitalist at Binary Capital – a $500m early stage consumer tech fund started by investors in Snapchat, Instagram, Twitter, Chloe & Isabel, Stitch Fix, etc. In a medium post, she shared tips and lessons startup founders should bear in mind when seeking VC investments.
Tiffany claims what makes or mar a startup’s chance is the brevity or not of the pitch. According to her most VCs can hardly concentrate for long. Here is her advice:
The sad truth is that most VCs are super ADD (Attention Deficit Disorder) and get distracted and bored within the first 5 minutes. Don’t wait until the middle of your pitch to unveil whatever makes your startup better than the others. Cut to the chase.
Here are a few example questions VCs will ask to get a sense of the overall startup: On background & team — what made you want to build this company? how did the founders meet? (essentially testing for founder-market fit) On traction & ability to execute — for consumer social products: active users (DAU / WAU / MAU), retention, engagement. For consumer marketplaces: check out Bill Gurley’s piece and Version One’s guide.
Reply to junior VCs. They have a lot more power than you think, and can help push your company through their firm’s pipeline.
Reply to VCs even if they pass on your company. Also don’t be unnecessarily aggressive if this does end up happening – just prove them wrong.
Keep junior folks in the loop. This is probably more relevant for communication with smaller VC firms, rather than with big ones. For me, on an investment team of 4, I always felt extra appreciated when founders took the time to find my email after the meeting and loop me into follow-up emails and updates. Trust me, we notice. The little things matter.
Be confident in yourself and your business — don’t let VCs push you around.
Just like how a potential investor is going to do a background check on you, you should do the same with him/her and the firm. Talk to 1–2 of each: 1) current investments 2) dead portfolio companies and maybe even 3) founders they passed on. It’s surprising how many people don’t talk about this, but it’s quite important to know whether this VC is actually useful, will help you through thick and thin, and will follow through on promises.
Why not check out the full post here.